BCA Elevate 12 Turn Your Inherited IRA Into Lifetime 83096 (08/18)
A New Option for Inherited IRAs What you do with your inheritance today can help create a more independent retirement years from now. Because an inherited Individual Retirement Account (IRA) requires distributions in the first year, you may feel like you can't choose to protect and grow your inheritance. 1 Now, you have a new option, which may offer benefits every year for the rest of your life, including: Deferred Taxation Your inheritance and interest earnings, if any, are only taxed when you receive Required Minimum Distributions (RMDs), withdrawals or income. Supplemental Before Retirement Receive Required Minimum Distributions each year while your retirement income grows. Guaranteed for Life When you retire, you ll receive income every year for life, regardless of what happens with the markets. The Balanced Choice Annuity Elevate 12 (BCA Elevate 12) helps grow retirement savings protected from downside market risk, and the Balanced Allocation Lifetime Rider Stacked Growth Option Max (SGO Max), an optional rider available for an additional cost, offers a source of retirement income you can t outlive. Products offered by Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, which issues the product described within. 1 Inherited IRAs here refer to non-spousal inheritances. Federal tax law generally requires non-spouse inheritors of IRAs to start taking withdrawals the year after the inheritance is received. Under current tax law, the Internal Revenue Code already provides tax deferral to qualified money, so there is no additional tax benefit obtained by funding an IRA with an annuity. Consider the other benefits provided by an annuity, such as lifetime income and a death benefit. Please consult a tax advisor regarding the applicability of these rules to your specific situation. The information discussed in this section is general in nature and should not be construed in any way as tax advice. Neither Athene Annuity and Life Company nor its agents or employees are authorized to provide tax advice. 2
Rich Age 50 Inherited $500,000 IRA Objective: Defer a portion of the tax liability from a $500,000 inherited IRA and create a source of guaranteed income in retirement. Solution: Purchases BCA Elevate 12 and SGO Max with his inherited IRA. Result: Based on a hypothetical, non-guaranteed 5.87% annual rate, Rich would receive $298,883 in total supplemental income in the first 15 years as Required Minimum Distributions (RMDs). When Rich retires at age 65, he would receive $48,036 every year for the rest of his life. At Age 80, he would have received $1,019,430 in total income. 2 More, Less Tax If Rich took his inheritance as a lump sum, the entire $500,000 is taxable and could potentially push him into the highest marginal tax bracket for that year. An inherited IRA can be rolled over into a qualified retirement vehicle, such as BCA Elevate 12 with SGO Max, without causing a taxable event. By stretching RMD distributions, Rich can minimize current income taxes. 2 This hypothetical example assumes no additional or excess withdrawals. This is a hypothetical example to show how BCA Elevate 12 and the Balanced Allocation Lifetime Rider with Stacked Growth Option Max can work. Your experience will differ. Past performance is no guarantee of future performance. Hypothetical Assumptions: $500,000 premium in BCA Elevate 12 with SGO Max, 0% Strategy Rider Charge, 1% annual rider charge, Level Option. Hypothetical 5.87% annual interest earnings based on the average back-tested movement of the Merrill Lynch RPM Index from 12/31/02 to 12/31/17. The Merrill Lynch RPM Index was established on 3/1/16. 3
Turn Your Inherited IRA Into for Life Hypothetical Example Based on 0% Annual Interest End of Year Age RMD Withdrawals Cash Surrender Value Accumulation Value Base Lifetime Withdrawals Total 0 51 $14,620 $421,625 $479,780 $570,612 $0 $14,620 1 52 $14,451 $405,653 $459,623 $580,879 $0 $29,071 2 53 $14,274 $389,595 $439,540 $590,739 $0 $43,345 3 54 $14,088 $373,464 $419,545 $600,124 $0 $57,433 4 55 $13,892 $357,272 $399,651 $608,962 $0 $71,325 5 56 $13,687 $341,036 $379,875 $617,174 $0 $85,012 6 57 $13,471 $326,661 $360,233 $624,673 $0 $98,483 7 58 $13,244 $312,125 $340,742 $631,367 $0 $111,726 8 59 $13,005 $297,395 $321,423 $637,155 $0 $124,732 9 60 $12,755 $282,493 $302,297 $641,928 $0 $137,487 10 61 $12,492 $261,413 $276,966 $644,936 $0 $149,978 11 62 $11,938 $242,675 $252,129 $646,568 $0 $161,916 12 63 $11,357 $326,726 $227,841 $646,663 $0 $173,274 13 64 $15,412 $311,315 $199,496 $630,303 $0 $188,685 14 65 $15,412 $295,903 $171,479 $607,242 $0 $204,097 BEGIN LIFETIME INCOME WITHDRAWALS 15 66 $0 $270,095 $133,526 $581,434 $25,808 $229,905 16 67 $0 $244,288 $96,089 $555,627 $25,808 $255,712 17 68 $0 $218,480 $59,169 $529,819 $25,808 $281,520 18 69 $0 $192,672 $22,765 $504,011 $25,808 $307,328 19 70 $0 $166,864 $0 $478,203 $25,808 $333,136 20 71 $0 $141,056 $0 $452,395 $25,808 $358,944 21 72 $0 $115,249 $0 $426,588 $25,808 $384,751 22 73 $0 $89,441 $0 $400,780 $25,808 $410,559 23 74 $0 $63,633 $0 $374,972 $25,808 $436,367 24 75 $0 $37,825 $0 $349,164 $25,808 $462,175 25 76 $0 $12,017 $0 $323,357 $25,808 $487,983 26 77 $0 $0 $0 $297,549 $25,808 $513,790 27 78 $0 $0 $0 $271,741 $25,808 $539,598 28 79 $0 $0 $0 $245,933 $25,808 $565,406 29 80 $0 $0 $0 $220,125 $25,808 $591,214 Rich receives an average annual RMD of $13,606. By age 65, he receives $204,097 in RMDs. Rich's $25,808 annual income will never go down due to market performance. By age 80, he receives $591,214. Hypothetical Assumptions: $500,000 inherited IRA rolled over into BCA Elevate 12 with SGO Max, 0% Strategy Rider Charge, 1.00% Annual Rider Charge, 0% Interest Credits, Level Option. 4
Hypothetical Example Based on 5.87% Annual Interest End of Year Age RMD Withdrawals Cash Surrender Value Accumulation Value Base Lifetime Withdrawals Total 0 51 $14,620 $421,625 $480,591 $571,576 $0 $14,620 1 52 $14,476 $449,998 $517,786 $639,659 $0 $29,096 2 53 $16,080 $435,745 $496,201 $651,693 $0 $45,176 3 54 $15,904 $468,055 $532,956 $721,912 $0 $61,080 4 55 $17,648 $453,997 $509,068 $733,974 $0 $78,727 5 56 $17,434 $488,666 $544,926 $805,533 $0 $96,161 6 57 $19,324 $472,028 $518,618 $817,054 $0 $115,485 7 58 $19,067 $506,242 $553,066 $888,946 $0 $134,551 8 59 $21,109 $486,779 $524,238 $899,193 $0 $155,661 9 60 $20,803 $519,952 $556,708 $970,164 $0 $176,464 10 61 $23,004 $497,423 $525,278 $978,207 $0 $199,468 11 62 $22,641 $534,139 $555,150 $1,046,724 $0 $222,110 12 63 $25,007 $522,754 $521,062 $1,051,399 $0 $247,116 13 64 $24,658 $547,587 $547,587 $1,115,437 $0 $271,775 14 65 $27,108 $512,361 $510,828 $1,115,304 $0 $298,883 BEGIN LIFETIME INCOME WITHDRAWALS 15 66 $0 $506,217 $506,217 $1,082,234 $48,036 $346,919 16 67 $0 $447,501 $447,358 $1,034,197 $48,036 $394,956 17 68 $0 $435,986 $435,986 $986,161 $48,036 $442,992 18 69 $0 $378,088 $378,088 $938,124 $48,036 $491,029 19 70 $0 $359,422 $359,422 $890,088 $48,036 $539,065 20 71 $0 $302,485 $302,485 $842,051 $48,036 $587,102 21 72 $0 $275,759 $275,759 $794,015 $48,036 $635,138 22 73 $0 $219,782 $219,782 $745,978 $48,036 $683,175 23 74 $0 $184,139 $184,139 $697,942 $48,036 $731,211 24 75 $0 $129,123 $129,123 $649,905 $48,036 $779,248 25 76 $0 $83,602 $83,602 $601,869 $48,036 $827,284 26 77 $0 $29,546 $29,546 $553,832 $48,036 $875,321 27 78 $0 $0 $0 $505,796 $48,036 $923,357 28 79 $0 $0 $0 $457,759 $48,036 $971,393 29 80 $0 $0 $0 $409,723 $48,036 $1,019,430 Rich receives an average annual RMD of $19,926. By age 65, he receives $298,883 in RMDs. Rich's $48,036 annual income will never go down due to market performance. By age 80, he receives $1,019,430. Hypothetical Assumptions: $500,000 premium in BCA Elevate 12 with SGO Max, 0% Strategy Rider Charge, 1% annual rider charge, Level Option. Hypothetical 5.87% annual interest earnings based on the average back-tested movement of the Merrill Lynch RPM Index from 12/31/02 to 12/31/17. The Merrill Lynch RPM Index was established on 3/1/16. Performance shown before this date is back-tested by applying the index strategy, which was designed with the benefit of hindsight, to historical financial data. Back-tested performance is hypothetical and has been provided for informational purposes only. For more information on BCA Elevate 12 and the Merrill Lynch RPM Index, please ask your insurance professional. Past performance is not a guarantee of future performance. Assumes withdrawals are not subject to a Withdrawal Charge or a Market Value Adjustment (MVA). 5
Key Terms and Definitions What is a Fixed Indexed Annuity? A fixed indexed annuity is a contract issued by an insurance company. In exchange for your premium, the insurance company provides the opportunity for growth based in part on the performance of an underlying index within a larger strategy while protecting your money from downside market risk. All guarantees are backed by the claims-paying ability of the issuing carrier and may be subject to annual fees. Fixed indexed annuities are not stock market investments and do not directly participate in any stock or equity investments or index. It is not possible to invest directly in an index. Other restrictions and limitations may apply. For more information, please see the BCA Elevate product brochure. Explanation of Lifetime Rider and Rider Charge The Balanced Allocation Lifetime Rider Stacked Growth Option Max (SGO Max) is an optional rider that must be elected at contract issue and is available for an annual rider charge. The annual rider charge of 1.00% of the Base is calculated at the beginning of every contract year. The charge is deducted in monthly installments from the Accumulation Value as well as from the Minimum Guaranteed Contract Value in some states. On the 10th contract anniversary, you may elect to extend Base growth by up to 0.20% per year times the number of years extended up to the 18th contract anniversary. The rider charge may increase starting at the beginning of the 11th contact year. Base The Base is used to determine the annual Lifetime Withdrawals and annual Strategy Rider Charge, if applicable. SGO Max offers Base growth at a daily rate that is equivalent to 5% annual compound interest plus 100% of any BCA Elevate Interest Earnings every two years, minus the Strategy Rider charge, if applicable. Base growth is credited to the Base through the earlier of beginning Lifetime Withdrawals or the 10th contract anniversary (or up to the 18th anniversary if the roll-up is extended as discussed above). If you begin Lifetime Withdrawals before the end of a two-year term, Interest Earnings, if any, will be credited pro rata to the Base. The Base is not an amount that has a cash value or surrender value that can be paid out partially or in a lump sum. Withdrawals, prior to commencing Lifetime Withdrawals, will reduce the Base by the same percentage that the Accumulation Value is reduced for the withdrawal. However, the dollar amount of this reduction will not be less than the deduction from the Accumulation Value. After Lifetime Withdrawals have commenced, withdrawals up to the Lifetime Withdrawal amount will reduce the Base by the dollar amount of the withdrawal, while withdrawals in excess of the Lifetime Withdrawal amount will reduce the Base and future Lifetime Withdrawals by the same percentage that the Accumulation Value is reduced for the withdrawal. Withdrawals may also be subject to Withdrawal Charges, Premium Bonus Vesting Adjustments or Market Value Adjustments (MVAs), if applicable. For more information, please see the Certificate of Disclosure. Lifetime Withdrawals Lifetime Withdrawals are calculated by multiplying the greater of the Base or Accumulation Value by the current Annual Withdrawal Percentage when Lifetime Withdrawals begin. The Annual Withdrawal Percentage depends on the income option elected and is determined by the Age Lifetime Withdrawals begin. Age means your attained age for Single Life or the younger of your attained age or your spouse s attained age for Joint Life when your spouse is listed as the sole beneficiary or the contract is jointly owned. In general, the longer you wait to take income, the greater the initial Annual Withdrawal Percentage will be. When you re ready to begin Lifetime Withdrawals, SGO Max offers the following options: Level Option offers the highest initial amount. Inflation-Indexed Option increases the lifetime income annually based on increases in the Consumer Price Index, if any. Increases are capped at 10% per year and stop when the Maximum Inflation Adjustment Period has elapsed, which varies by state. Earnings-Indexed Option may increase the lifetime income at the end of every 2-year strategy term based on the rate of interest credited, if any, in the BCA Elevate strategy until the Accumulation Value is reduced to zero, after which time the Maximum Lifetime Withdrawal will increase by 1% per year guaranteed. The Inflation-Indexed Option and Earnings-Indexed Option offer less initial income than the Level Option but may provide more income over your lifetime due to potential increases after beginning Lifetime Withdrawals. Lifetime Withdrawals will continue even if they ultimately reduce the Accumulation Value to zero. Withdrawals in excess of the Lifetime Withdrawal may be subject to a Withdrawal Charge, MVA and Premium Bonus Vesting Adjustment and will reduce future Lifetime Withdrawals. Withdrawals in some instances could terminate the rider. For more information, please see the Certificate of Disclosure and ask your insurance professional. Withdrawals and surrender may be subject to federal and state income tax and, except under certain circumstances, will be subject to an IRS penalty if taken prior to age 59½. The information contained herein is based on our understanding of current tax law. The tax and legislative information may be subject to change and different interpretations. We recommend that you consult with your tax professional regarding your particular circumstance. Required Minimum Distributions BCA Elevate waives withdrawal charges, MVA and Premium Bonus Vesting Adjustments, if applicable, if you need to take Required Minimum Distributions. 6
Contact your Insurance Professional today for more information on BCA Elevate 12 7
This material is a general description intended for general public use. Athene Annuity and Life Company is not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice. Please reach out to your insurance professional if you have any questions about this product or its features. ATHENE ANNUITIES ARE A PRODUCT OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSURED BY FDIC OR NCUA/NCUSIF. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT. This annuity has limitations and charges. For costs and complete details, please request a Certificate of Disclosure. Upon surrender of the contract or withdrawal from the contract, you may be subject to federal and state income taxes on some or all of the amount received. Generally, the tax treatment of your annuity contract will depend on a variety of factors, including whether the contract is comprised of non-qualified or qualified funds. Athene Annuity and Life Company s Product ( Product ) is not sponsored, endorsed, sold or promoted by Merrill Lynch, Pierce, Fenner & Smith Incorporated or its affiliates ( BofA Merrill Lynch ). BofA Merrill Lynch has not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Product, nor makes any representation or warranty, express or implied, to the owners of Product or any member of the public regarding the Product or the advisability of purchasing the Product, particularly the ability of the Merrill Lynch RPM Index TM ( Index ) to track performance of any market or strategy. 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THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND ATHENE ANNUITY AND LIFE COMPANY, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES. 2018 Annexus Balanced Allocation Lifetime Rider (BALIR ) and Family Endowment Rider are registered trademarks of and exclusively distributed by Annexus. All rights reserved including all rights to Balanced Choice Annuity. The Balanced Choice Annuity Elevate [ANN08 (04/15), ANN10 (04/15), ANN12 (04/15)], or state variation, The Family Endowment Rider [DBR (04/15), BDBR (04/15), SUBDR (04/15)] or state variation, The Balanced Allocation Lifetime Rider [ANNIR (04/15)] or state variation, Strategy Rider [ANNBAS (04/15)], or state variation, are issued by Athene Annuity and Life Company, West Des Moines, IA. Product features, limitations and availability vary; see Certificate of Disclosure for full details. Products not available in all states. This material is provided by Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, which issues the product described herein. 83096 (08/18)